LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”)
announces today operating results for the quarter ended June 30,
2014. The Company reported an increase of 17.6% in Funds from
Operations (“FFO”) to $22.5 million in the quarter ended June
30, 2014, from $19.1 million in the comparable 2013 period.
FFO per diluted common share was $0.64 and $0.57 for the quarters
ended June 30, 2014 and 2013, respectively. Normalized FFO
increased by 16.9% to $22.5 million in the second quarter of
2014 from $19.2 million in the second quarter of 2013.
Normalized FFO per diluted common share was $0.64 and $0.57 for the
quarters ended June 30, 2014 and 2013, respectively. The increase
in FFO and normalized FFO was due to higher revenues from 2013
mortgage loan originations, acquisitions and completed property
developments.
During the quarter ended June 30, 2014, the Company sold two
assisted living properties with a total of 133 units and one school
generating net proceeds of $7.7 million, resulting in a net
gain on sale of $1.1 million.
Net income available to common stockholders increased by 44.6%
to $17.3 million in the second quarter of 2014, or $0.50 per
diluted share, from $12.0 million, or $0.36 per diluted share,
for the same period in 2013. The increase in net income available
to common stockholders was due to higher revenues from 2013
mortgage loan originations, acquisitions and completed property
developments, and a gain on sale.
Subsequent to June 30, 2014, the Company locked rate on
$30.0 million of senior unsecured notes under its private
shelf agreement with affiliates and managed accounts of Prudential
Investment Management, Inc. and expect to close on the transaction
in August 2014. The notes will bear interest at 4.50% and mature on
July 31, 2026.
Conference Call
Information
The Company will conduct a conference call on Thursday, August
7, 2014, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to
provide commentary on the Company’s performance and operating
results for the quarter ended June 30, 2014. The conference call is
accessible by telephone and the internet. Telephone access will be
available by dialing 877-510-2862 (domestically) or 412-902-4134
(internationally). To participate in the webcast, log on to the
Company’s website at www.LTCProperties.com 15 minutes before the
call to download the necessary software.
An audio replay of the conference call will be available from
August 7 through August 21, 2014 and may be accessed by dialing
877-344-7529 (domestically) or 412-317-0088 (internationally) and
entering conference number 10049113. Additionally, an audio archive
will be available on the Company’s website in the “Presentations”
section of the “Investor Information” tab. The Company’s earnings
release and supplemental information package for the current period
will be available on the Company’s website in the “Press Releases”
and “Presentations” sections, respectively, of the “Investor
Information” tab.
About LTC
At June 30, 2014, LTC had 224 investments located in 29 states
comprising of 101 skilled nursing properties, 104 assisted living
properties, nine range of care properties, one school, five
parcels of land under development and four parcels of land
held-for-use. Assisted living properties, independent living
properties, memory care properties and combinations thereof are
included in the assisted living property type. Range of care
properties consist of properties providing skilled nursing and any
combination of assisted living, independent living and/or memory
care services. The Company is a self-administered real estate
investment trust that primarily invests in senior housing and
long-term care facilities through facility lease transactions,
mortgage loans and other investments. For more information on LTC
Properties, Inc., visit the Company’s website at
www.LTCProperties.com.
Forward Looking
Statements
This press release includes statements that are not purely
historical and are “forward looking statements” within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding the Company’s expectations, beliefs,
intentions or strategies regarding the future. All statements other
than historical facts contained in this press release are forward
looking statements. These forward looking statements involve a
number of risks and uncertainties. Please see our most recent
Annual Report on Form 10-K, our subsequent Quarterly Reports on
Form 10-Q, and our other publicly available filings with the
Securities and Exchange Commission for a discussion of these and
other risks and uncertainties. All forward looking statements
included in this press release are based on information available
to the Company on the date hereof, and the Company assumes no
obligation to update such forward looking statements. Although the
Company’s management believes that the assumptions and expectations
reflected in such forward looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct. The actual results achieved by the Company may differ
materially from any forward looking statements due to the risks and
uncertainties of such statements.
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(unaudited amounts in thousands, except
per share amounts)
Three Months EndedJune 30, Six Months EndedJune 30,
2014 2013 2014
2013 Revenues: Rental income $ 25,025 $ 24,539 $
50,277 $ 49,015 Interest income from mortgage loans 4,139 1,050
8,232 2,109 Interest and other income 63 92
156 185 Total revenues
29,227 25,681 58,665
51,309 Expenses: Interest expense 3,088 2,798 6,275
5,931 Depreciation and amortization 6,302 6,124 12,600 12,250
General and administrative expenses 2,704
2,869 5,653 6,287 Total expenses
12,094 11,791 24,528
24,468 Operating income 17,133 13,890 34,137
26,841 Gain on sale of real estate, net 1,140
— 1,140 — Income from continuing
operations 18,273 13,890 35,277 26,841 Discontinued operations:
Income from discontinued operations — 27 — 52 Loss on sale of real
estate, net — (1,014 ) —
(1,014 ) Net loss from discontinued operations — (987 ) — (962 )
Net income 18,273 12,903 35,277 25,879 Income allocated to
participating securities (117 ) (91 ) (220 ) (189 ) Income
allocated to preferred stockholders (818 ) (818 )
(1,636 ) (1,636 ) Net income available to common
stockholders $ 17,338 $ 11,994 $ 33,421 $
24,054
Basic earnings per common
share:
Continuing operations $ 0.50 $ 0.39 $ 0.97 $ 0.79 Discontinued
operations $ 0.00 ($0.03 ) $ 0.00
($0.03 ) Net income available to common stockholders $ 0.50
$ 0.36 $ 0.97 $ 0.76
Diluted
earnings per common share: Continuing operations $ 0.50 $ 0.39
$ 0.96 $ 0.79 Discontinued operations $ 0.00 ($0.03 )
$ 0.00 ($0.03 ) Net income available to common
stockholders $ 0.50 $ 0.36 $ 0.96 $ 0.76
Weighted average shares used to calculate earnings
per common share: Basic 34,597 32,913
34,592
31,645 Diluted 36,621
32,946 36,617 31,679
Supplemental Reporting
Measures
FFO, adjusted FFO (“AFFO”), and Funds Available for Distribution
(“FAD”) are supplemental measures of a real estate investment
trust’s (“REIT”) financial performance that are not defined by U.S.
generally accepted accounting principles (“GAAP”). Investors,
analysts and the Company use FFO, AFFO and FAD as supplemental
measures of operating performance. The Company believes FFO, AFFO
and FAD are helpful in evaluating the operating performance of a
REIT. Real estate values historically rise and fall with market
conditions, but cost accounting for real estate assets in
accordance with U.S. GAAP assumes that the value of real estate
assets diminishes predictably over time. We believe that by
excluding the effect of historical cost depreciation, which may be
of limited relevance in evaluating current performance, FFO, AFFO
and FAD facilitate like comparisons of operating performance
between periods. Additionally the Company believes that normalized
FFO, normalized AFFO and normalized FAD provide useful information
because they allow investors, analysts and our management to
compare the Company’s operating performance on a consistent basis
without having to account for differences caused by unanticipated
items.
FFO, as defined by the National Association of Real Estate
Investment Trusts (“NAREIT”), means net income available to common
stockholders (computed in accordance with U.S. GAAP) excluding
gains or losses on the sale of real estate and impairment
write-downs of depreciable real estate plus real estate
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Normalized FFO
represents FFO adjusted for certain items detailed in the
reconciliations. The Company’s computation of FFO may not be
comparable to FFO reported by other REITs that do not define the
term in accordance with the current NAREIT definition or have a
different interpretation of the current NAREIT definition from that
of the Company; therefore, caution should be exercised when
comparing our Company’s FFO to that of other REITs.
We define AFFO as FFO excluding the effects of straight-line
rent and amortization of lease inducement. U.S. GAAP requires
rental revenues related to non-contingent leases that contain
specified rental increases over the life of the lease to be
recognized evenly over the life of the lease. This method results
in rental income in the early years of a lease that is higher than
actual cash received, creating a straight-line rent receivable
asset included in our consolidated balance sheet. At some point
during the lease, depending on its terms, cash rent payments exceed
the straight-line rent which results in the straight-line rent
receivable asset decreasing to zero over the remainder of the lease
term. By excluding the non-cash portion of straight-line rental
revenue and amortization of lease inducement, investors, analysts
and our management can compare AFFO between periods. Normalized
AFFO represents AFFO adjusted for certain items detailed in the
reconciliations.
We define FAD as AFFO excluding the effects of non-cash
compensation charges. FAD is useful in analyzing the portion of
cash flow that is available for distribution to stockholders.
Investors, analysts and the Company utilize FAD as an indicator of
common dividend potential. The FAD payout ratio, which represents
annual distributions to common shareholders expressed as a
percentage of FAD, facilitates the comparison of dividend coverage
between REITs. Normalized FAD represents FAD adjusted for certain
items detailed in the reconciliations.
While the Company uses FFO, normalized FFO, normalized AFFO and
normalized FAD as supplemental performance measures of our cash
flow generated by operations and cash available for distribution to
stockholders, such measures are not representative of cash
generated from operating activities in accordance with U.S. GAAP,
and are not necessarily indicative of cash available to fund cash
needs and should not be considered an alternative to net income
available to common stockholders.
Reconciliation of FFO, Normalized FFO,
Normalized AFFO and Normalized FAD
The following table reconciles each of net income, FFO and
normalized FFO available to common stockholders, as well as
normalized AFFO and normalized FAD (unaudited, amounts in
thousands, except per share amounts):
Three Months EndedJune 30, Six Months EndedJune 30,
2014 2013 2014
2013 Net income available to common stockholders $
17,338 $ 11,994 $ 33,421 $ 24,054 Add: Depreciation and
amortization (continuing and discontinued operations) 6,302 6,131
12,600 12,267 (Less) add: (Gain) loss on sale of real estate, net
(1,140 ) 1,014 (1,140 ) 1,014
FFO available to common stockholders 22,500 19,139 44,881
37,335 Add: Non-cash interest related to earn-out liabilities — 110
— 220 Add: Non-recurring one-time items — —
— 707
(1)
Normalized FFO available to common stockholders 22,500 19,249
44,881 38,262 Less: Non-cash rental income (443 )
(758 ) (917 ) (1,530 ) Normalized adjusted FFO (AFFO)
22,057 18,491 43,964 36,732 Add: Non-cash compensation charges 783
523 1,449 1,051 Less: Capitalized interest (435 )
(323 ) (742 ) (500 ) Normalized funds available for
distribution (FAD) $ 22,405 $ 18,691 $ 44,671
$ 37,283
(1) Represents the one-time severance and
accelerated restricted stock vesting charges related to the
retirement of our former Senior Vice President, Marketing and
Strategic Planning.
Basic FFO
available to common stockholders per share $ 0.65 $ 0.58
$ 1.30 $ 1.18 Diluted FFO available to common
stockholders per share $ 0.64 $ 0.57 $ 1.27 $
1.16 Diluted FFO available to common stockholders $
23,435 $ 20,048 $ 46,737 $ 39,160
Weighted average shares used to calculate diluted FFO per share
available to common stockholders 36,848 35,139
36,828 33,881
Basic normalized FFO
available to common stockholders per share $ 0.65 $ 0.58
$ 1.30 $ 1.21 Diluted normalized FFO available
to common stockholders per share $ 0.64 $ 0.57 $ 1.27
$ 1.18 Diluted normalized FFO available to
common stockholders $ 23,435 $ 20,158 $ 46,737
$ 40,087 Weighted average shares used to calculate diluted
normalized FFO per share available to common stockholders
36,848 35,139 36,828
33,881
Basic normalized AFFO per share $ 0.64 $ 0.56
$ 1.27 $ 1.16 Diluted normalized AFFO per share $
0.62 $ 0.55 $ 1.24 $ 1.14
Diluted normalized AFFO $ 22,992 $ 19,400 $ 45,820
$ 38,557 Weighted average shares used to calculate
diluted normalized AFFO per share 36,848
35,139 36,828 33,881
Basic normalized
FAD per share $ 0.65 $ 0.57 $ 1.29 $ 1.18
Diluted normalized FAD per share $ 0.63 $ 0.56
$ 1.26 $ 1.15 Diluted normalized FAD $ 23,340
$ 19,600 $ 46,527 $ 39,108 Weighted
average shares used to calculate diluted normalized FAD per share
36,848 35,139 36,828
33,881
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
June 30, 2014 December 31, 2013
ASSETS (unaudited)
(audited) Real estate investments: Land $ 79,211 $ 80,993 Buildings
and improvements 877,305 856,624 Accumulated depreciation and
amortization (228,323 ) (218,700 ) Net real estate
property 728,193 718,917 Mortgage loans receivable, net of
allowance for doubtfulaccounts: 2014 — $1,698; 2013 — $1,671
168,068
165,444 Real estate investments, net 896,261 884,361 Other
assets: Cash and cash equivalents 8,064 6,778 Debt issue costs, net
2,114 2,458 Interest receivable 655 702 Straight-line rent
receivable, net of allowance for doubtfulaccounts: 2014 — $714;
2013 — $1,541 30,913 29,760 Prepaid expenses and other assets 6,569
6,756 Notes receivable 612 595 Total
assets $ 945,188 $ 931,410
LIABILITIES
Bank borrowings $ 42,000 $ 21,000 Senior unsecured notes 251,633
255,800 Bonds payable 1,400 2,035 Accrued interest 3,450 3,424
Accrued expenses and other liabilities 14,429
16,713 Total liabilities 312,912 298,972
EQUITY Stockholders' equity: Preferred stock $0.01 par
value; 15,000 shares authorized; shares issued and outstanding:
2014 — 2,000; 2013 — 2,000 38,500 38,500 Common stock: $0.01 par
value; 60,000 shares authorized;shares issued and outstanding: 2014
— 34,845; 2013 — 34,746 348 347 Capital in excess of par value
690,373 688,654 Cumulative net income 817,125 781,848 Accumulated
other comprehensive income 99 117 Cumulative distributions
(914,169 ) (877,028 ) Total equity 632,276 632,438
Total liabilities and equity $ 945,188 $ 931,410
LTC Properties, Inc.Wendy L. SimpsonPam Kessler(805)
981-8655
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